General Motors, Audi, and BMW are revving their engines as they plan the introduction of new luxury electric/hybrid models aimed at competing with Tesla’s Model S.

The popularity of the Tesla Motors(NASDAQ:TSLA)Model S among luxury electric/hybrid vehicles is about to be tested. Rival automakers General Motors(NYSE:GM), Volkswagen(NASDAQOTH:VLKAY), and BMW(NASDAQOTH:BAMXF) are ready to show off the results of their investments in all-electric and hybrid vehicle technologies over the next two years, all at price ranges similar to that of the Model S.

Tesla's rollercoaster yearIncreased competition for Tesla will add yet another complication to the company's eventful 2013.

Tesla's shares started the year trading at about $37, but as the company reported higher production numbers and increasing sales, investor interest grew. Share price rose steadily over the next few months, peaking at about $193 by September .

But the steep rise in the stock price came to a halt as news rolled in about Model S car battery fires, questions about the car's safety arose, and the perception that the company's stock was overvalued grew. Since Oct. 1, the share price has decreased about 37%, as internal and regulatory investigations attempt to explain the possible causes of the battery fires. As the issue is reviewed, Tesla has also amended its warranty to cover vehicle damage due to fire, even if the cause was due to an unintentional driver error.

GM and BMW to debut vehicles in 2014As Tesla manages the ups and downs of its business, rival automakers are ready to introduce their new luxury plug-ins to consumers. GM's Cadillac division will be selling its new ELR model starting in January 2014. The car, which borrows its power train from the Chevy Volt, is an "extended-range" electric vehicle (EV) with a gas-powered generator used to recharge the battery.

Like the Volt, the ELR has a 37-mile electric range and a 82 MPG-equivalent according to EPA guidelines . For a car with a starting price of $75,000 -- compared to the Model S's $62,400 -- some critics have drubbed the ELR for taking a sluggish 8.8 seconds to reach 60 mph in EV mode.

GM plans to sell about 3,000 ELR models annually in North America, or about 1/7 of the sales volume of the Chevy Volt. The Volt saw a 32% drop in sales in October, suggesting that it may be time for GM to lower its price to better compete with other EVs like the Nissan Leaf.

GM has low sales expectations for the ELR, since it's releasing the model primarily as a design and technology statement for Cadillac. If consumers show interest in the ELR, it will interesting to see whether GM considers lowering the price or building a cheaper version of the vehicle.

BMW's plug-in model, the i3, will go on sale in the U.S. in the first half of 2014. The car is expected to be the lightest EV on the market at just more than 2,700 pounds. Its driving range is 90-plus miles, and it boasts good acceleration, going from 0 to 60 in less than eight seconds. Battery charge time is about three hours, and the vehicle has an option of adding a small gas engine that extends its total range to 160 to 180 miles .

The i3 caters to the transportation needs of megacity drivers living in areas with 10 million or more people, where getting around is a challenge. BMW has recognized that the growth of megacities is a major global trend. Prior to hitting showrooms in Europe, the i3 had more than 8,000 reservations, and the company is considering an increase in production if demand keeps up. With an estimated price range of $40,000 to $50,000, BMW sales forecasts predict that more than 10,000 units of the model will sell next year .

Audi's coming attraction for 2015 – the A3 e-tronVolkswagen's luxury brand, Audi, has a new plug-in hybrid: the A3 e-tron. It will debut in Europe in Spring 2014, and in the U.S. in 2015. Like BMW's i3, the e-tron also comes with a gas engine that takes over when the battery has worn out or when driving at higher speeds. It takes about 2.5 hours to charge the battery. Priced at $51,100, the car offers a 31-mile driving range in electric mode and a total driving range of 584 miles .

Unlike GM's ELR, the A3 e-tron comes with high sales expectations, according to Audi's Senior Director of Sales for the Americas Martin Sander. According to Sander, the company's new plug-in hybrid will set the stage for future models with electric and hybrid drivetrains . Audi has ambitious sales forecasts for its models and is aiming to sell 2 million cars a year by 2020 .

My Foolish conclusionCompetition in the luxury electric and hybrid car segment is heating up, as affluent consumers interested in going green will have more options to choose from. BMW, Audi, and Cadillac expect their new models to showcase their commitment to greener technologies that are slowly becoming more mainstream.

For BMW and Audi, the future is now; they're counting on their customers showing interest in buying these models. GM's limited sales expectations for the Cadillac ELR shows that the model will serve as a way to convey to its customers that switching to greener technology doesn't mean the sacrifice of luxury and comfort.

As for Tesla, the company expects to reach its 25% gross margin target and unit sales of 21,500 by the end of the fourth quarter. Time will tell whether competition from these new vehicles will have any effect on the Model S's sales and margin goals.